A grant program intended to promote Alberta's film and production industry and bolster the economy gave away more than $1 million in ineligible expenses, says the provinces auditor general.

"There are clear cases where the expenses weren't eligible," assistant auditor general Eric Leonty said Thursday at a news conference.

The Alberta Production Grant program offered up to $5 million, or 30 per cent of production funds, to eligible companies, providing $140 million in production support over the last five years.

An audit of the program, prompted by two anonymous complaints and completed in October 2015, found five Alberta-based companies had wrongfully claimed $1.2 million in expenses since 2013.

The audit found that costs claimed as Alberta expenses were actually paid to vendors in Ontario, the United States and British Columbia, and that salaries claimed under the program went to non-Alberta residents.

Since February 2016, Alberta Culture and Tourism has been trying to recover the expenses from two of the companies, while writing off expenses paid to three others because the guidelines were so unclear.

The minister's office said today $169,630 has been recovered from one company, and they're in the process of recovering the remaining $260,000.

Assistant auditor general Eric Leonty said the grant program has been around for several years.

Unless a detailed examination is done in the department of culture and tourism, he said, it's hard to know exactly how much was paid out incorrectly.

"Unless there's the necessary work done to evaluate previously whether there was ineligible expenses, claimed or not, on sort of a broader scale, it's difficult to conclude exactly what the amount may be," Leonty said.

Minister of Culture and Tourism Ricardo Miranda said his department began addressing the need for strengthened financial and audit controls of the grant program when it became aware of the problems in late 2015.

He said new guidelines took time to adopt because of the need to consult industry.

"The previous government, the program that they implemented, simply left a lot open, basically a bottomless pit," Miranda said.

The provincial government announced a new grant program that the minister says contains tougher guidelines and stricter financial controls on Oct. 3.

The department of culture and tourism says the Alberta Production Grant Program had been around since 1998.